Why is it so difficult to make money on correct forecasts?
Many novice traders are faced with a similar situation: after all, the forecast was correct, why didn’t it work?
Let's figure it out. So, suppose the forecast really turned out to be correct, even came to the take-up that was predicted by the trader. But why didn’t you make money on it?
There are several reasons for this.
1. Fear that worked on you. The price did not reach the take, it turned around, maybe halfway, perhaps before it reached just a few points. What did a trader who is still at odds with his discipline do? At best, it will close at the market price. At worst, he will watch how the possible profit on his deposit decreases and decreases. It can reach the level of entry into the transaction. Well, then it's scary to enter. But the market seemed to be waiting for this. The price reverses and moves just in the direction of the take, and then it comes to it. The trader can only bite his elbows.
2. Uncertainty in one's own trading system, in oneself. I recall cases when, under such circumstances, it was best to close, rather than wait for profit.
3. The deal can be overexposed. From positive territory, the price can quickly jump to negative territory. A trader can either go into a long drawdown or take off at a stop loss.
4. Was the forecast really correct? A lot of novice traders proudly declare that, here, they predicted this, it was here that the price was supposed to come. Yes, but the question is: when did they expect this? It is clear that the price has come. As they say, even a broken watch twice a day shows the correct time. And here is the same. While the pair got there, it was possible to drain the deposit several times.
5. Objective reasons when fundamental factors intervene and begin to move the market in the opposite direction. There is all hope for a stop loss, if it is, of course, set. Asset prices could collapse on the market at any time. This is due to the fact that different political news is perceived by investors differently.
Predicting at what point this can happen is almost impossible.
6. The market is chaos. There is nothing more volatile than the forex market. And why? Because the market price is formed from supply and demand. And the more money a player has, the more chances there are to turn the market in his direction with the greatest benefit.
But any defeat or lack of profit should be treated philosophically. At the same time, it is imperative to do work on errors and understand why it did not work out?
A critical attitude to yourself and to your trading system with a systematic approach will necessarily lead to luck. In order to make money easy it is necessary to treat the market like a game: if you lose, wait for time, calm down and try again with renewed vigor.
Parsing your mistakes helps. It is necessary to stop trading if the forecast has not been justified.